Price correction underway

According to property brokers, mortgage caps that were put into place in December are causing buyers to rethink their decision to purchase a home, resulting in a price drop for villas. Property brokers are warning that villa prices in Dubai could be starting to fall as new mortgage caps subdue the market for multi-million-dirham homes, The National reported.
Brokers say that the new laws which come into effect at the end of December, are forcing buyers to rethink their decision, causing a drop in prices of villas at a time when scores more are being built.
According to research from the property consultancy Phidar Advisory, prices for single-family homes in Dubai rose steadily over the first half of the year, but provisional figures for the six weeks to August 15 showed that they fell 4%.
“The Dubai residential price correction now under way is a sign of early detection relative to the last cycle,” said Jesse Downs, the Phidar Advisory managing director. “[We] predict prices will decline in the second half of 2014 but this should be considered a price correction in response to exuberant speculation building over the past two years combined with contractionary monetary policy,” Ms Downs added.
Others say that while price growth for villas is cooling, there has been no sign of actual decreases in prime residential areas.